Rooted in retirement report

Overall, it seems two-thirds of those surveyed are confident that their savings and pension will see them through retirement. ^{Footnote [1]}  And while one in five are “very” confident, more than two in five are “somewhat” confident.    

There is, however, a noticeable difference between genders, ages and some regions. 

Rather expectedly, older generations are more confident that their retirement funds will last than those who are younger. While more than half of those aged 55 to 64 believe their retirement savings and pension will last them, this rises to 88% of those aged 85+. ^{Footnote [1]} And people in North East England are the most confident that their retirement funds will go the distance.^{Footnote [1]}

However, women surveyed were nearly 20% less likely than men to feel confident their retirement income would be enough.^{Footnote [1]}

Given the gender pay and pension gaps, more on this below, it’s understandable that some women could feel less certain about their financial security in retirement.

What’s the gender pension gap?

“The gender pension gap,” explains a House of Commons briefing on the subject, “can mean the differences in retirement income or retirement wealth for men and women.” ^{Footnote [2]} It can be measured by differences in:^{Footnote [2]}

• pension wealth at different ages 
• pension income received 
• state pension income.

On average, women live longer than men. ^{Footnote [2]} This means that, on average, women need more money in their pension to have the same amount of income each year throughout their retirement. ^{Footnote [2]} And there are a few factors that help influence the gender pension gap, including differences in:^{Footnote [2]}

1. working patterns – this could be taking time off work for caring responsibilities or working part-time.
2. earnings – women, on average, earn less than men.  While the gender pay gap, which measures the difference between average hourly earnings for men and women, is declining slowly over time – it’s nevertheless a reality. ^{Footnote [3]} In April 2024, for example, the median hourly earnings for men were £19.24 and £17.88 for women (both excluding overtime). ^{Footnote [3]}
   Over the last decade, the gender pay gap fell by about a quarter among full-time employees. ^{Footnote [3]} In April 2024, it fell by half a percentage point (from 7.5% in 2023 to 7.0%). The gender pay gap has a significant role to play in influencing the gender pension gap. ^{Footnote [3]}
3. scheme types – there may be differences between men and women in the types of schemes they’d most likely join. Related to this, how someone is enrolled into a pension can affect men and women differently because of their employment patterns. 
4. divorce settlements – Some women may lose out on pension benefits in divorce not only because their pension pot may be smaller (for the many reasons listed above), but also because they may waive their right to a share of their ex-spouse’s pension or not fully explore pension sharing options. 

Alongside the pay and pension gaps, some women are seemingly concerned about rising living costs.

Confidence through rising living costs 

Half of surveyed women, unlike 41% of the men, admit that rising living costs have impacted their ability to keep up their desired lifestyle in retirement. ^{Footnote [1]} The top five UK cities, based on our survey, where people feel most impacted by rising living costs include:^{Footnote [1]}

1. Brighton (60%)
2. Belfast (58%)
3. Bristol (50%)
4. Plymouth (49%)
5. Manchester (48%)

According to our survey, the cities with the highest and lowest confidence in their retirement savings lasting are: ^{Footnote [1]}

Between rising living costs and confidence in your retirement savings, you may wonder what options are available to stretch your pension pot further. For some, this may mean exploring financial options through their home (more on this below). But, this could bring up some challenging emotions.

More than three-fourths of people surveyed say they’re emotionally attached to their home, with three in ten admitting they’re “extremely emotionally attached.” ^{Footnote [1]}  

And, like dandelion roots in the front garden, it seems the emotional attachment to the home grows with time. 84% of those who lived in their home for 25 years or longer are emotionally linked to their home. ^{Footnote [1]}

Those who have this connection are scattered across the UK. The cities with people most emotionally attached to their home include: ^{Footnote [1]}

• Edinburgh (85%)
• Leeds (81%)
• Norwich (81%)
• Cardiff (80%)
• Liverpool (79%)

Staying put through retirement

More than two-fifths of those who plan to retire prefer to stay in their home for familiarity and comfort.  Others would like to live in their home when they retire because they:^{Footnote [1]}

• believe there's no financial reason to move 
• are close to friends and family 
• feel secure and stable 
• have the emotional comfort of staying in a place where they’ve built a life
• have a connection to the local community   

For men, having no financial reason to move is the greatest reason to stay put in retirement, but that’s 17% less of a reason for women. For women, the greatest reason is familiarity and comfort.

Leaving their home, for nearly half of those surveyed, would feel like losing a part of their identity. ^{Footnote [1]} And for two-thirds of them, their home helped with their personal, well-being over the years. ^{Footnote [1]}  

For more than half of those surveyed, leaving would be difficult because of the effort they’ve put into their home. ^{Footnote [1]} “It’s my pride and joy” and “I see my home as my legacy” are the top ways some people view their home while nearly two-thirds see it as one of their life’s biggest achievements. ^{Footnote [1]}  

Making home improvements and staying put

On average, those surveyed spent £37,921 on renovations or upgrades (like extensions, loft conversions, or remodeling of rooms) to their home. More than three in twenty of our survey participants spent between £20,001 and £30,000.^{Footnote [1]}

For more than two-thirds of those who made home improvements, they did so for practical reasons, specifically “making improvements to avoid having to move.” ^{Footnote [1]}  

Even winning the lottery wouldn’t sway some to move. Rather, one in five people, if they won £1 million, would stay in their home and make renovations. ^{Footnote [1]}  

Limits to loving the house    

Although, for some of those surveyed, attachment to their house has limitations. Nearly one-third admit they’ve never turned down a significant life opportunity (like a job, relationship, or lifestyle change) because they didn’t want to leave their home. ^{Footnote [1]} Rather, they would’ve moved for the right opportunity. And almost a quarter see their home rather practically as “a place to live, I’m not sentimental about it.” ^{Footnote [1]}  

But, in the last five years, more than three in five never thought about selling their home. ^{Footnote [1]} For some, this may be because of the emotional attachment to their home. For others, selling their home for a smaller property may pose other challenges. 

Beyond the emotional attachment, 44% of those surveyed admit that downsizing their property in retirement would be difficult. ^{Footnote [1]} And the challenges seemingly become more pronounced with age: while 40% of those aged 55 to 64 find it difficult, that figure rises to 60% among those aged 85 and over. ^{Footnote [1]}  

For those planning to retire, having to move house during their retirement means worrying about: ^{Footnote [1]}  

• finding a suitable home (49%)
• the physical and logistical effort of moving (47%)
• the financial burden of selling and buying a new home (27%)
• adjusting to a new area or environment (23%)
• the administrative burden (like changing address and notifying utilities) [18%].

What about your legacy and inheritance?

Nearly two in five people surveyed said they’d rather pass their home down to a family member, seeing it as part of their family’s legacy, rather than sell it to downsize and unlock money for retirement. ^{Footnote [1]}  

And it’s not because they feel pressured by their family. For 92% of people surveyed, the decision to pass on their home, or sell it to fund retirement, isn’t something they feel pressured into by family.

For some, the idea of moving house in their retirement years is too much. Exploring options like equity release, which allows you to access some of the money tied up in your property without having to move, may offer a helpful solution.  

There are two main types of equity release in the UK, both designed for homeowners aged 55 and older who want to access some of the money tied up in their home without having to move.

82% of our survey participants haven’t thought of using equity release to help fund their retirement. While half prefer other financial methods to support their retirement, more than three in ten don’t “believe property wealth should be used in retirement planning.” ^{Footnote [1]}  

Some, however, have considered it but need more information before making a decision.

Lifetime mortgage

This is the most common type. With a lifetime mortgage, you’ll borrow money against the value of your home. So, you’ll still own your home and can live in it through your retirement. You won’t have to make monthly repayments (unless you choose to) because the interest is added to the loan. Instead, interest builds up for as long as you have the mortgage and is charged on the total amount borrowed and the interest already added. This quickly increases the amount you owe. The loan and interest are usually repaid from the selling of your home when you (and your partner if it's a joint loan) pass away or need to go into long-term care, subject to our terms and conditions.

For example, let’s say that Margaret takes out a lifetime mortgage for £50,000. She doesn’t make any repayments. When Margaret passes away or needs to go into long-term care, her house is sold and the loan, plus interest, is repaid from the proceeds. 

Whether you decide to use the money for home renovations, helping the kids (or grandkids), or jetting off on adventures, it’s worth exploring the benefits and limitations of a lifetime mortgage. Please note the following benefits and limitations are true of Aviva's lifetime mortgage.

To check how much money you could release from your home, check out our equity release calculator. 

Home reversion plan 

This is less common and works differently to a lifetime mortgage. With this type of equity release, you’ll sell part of your home to a provider in exchange for a lump sum or regular payments. You’ll be able to live in your home rent-free for the rest of your life. And when the property is eventually sold, the provider gets a share of the proceeds. 

So, let’s say John sells 50% of his home to a provider. He gets a lump sum and stays in the house. When the house is sold, the provider gets 50% of the sale price. Although we don’t offer home reversion plans, it’s important to explore some of their benefits and limitations, too. 

Equity release versus downsizing 

If you’re exploring options to make your retirement money stretch the distance, you may wonder whether equity release or downsizing is better for you. 

And it entirely depends on your priorities. 

If you’re looking to free up money in retirement, but don’t want to increase your debt, then downsizing may feel like the right option.

But, if staying in your home is important for emotional or practical reasons and you’re comfortable with the long-term financial trade-offs, then equity release may be worth considering. 

Your home, holding within it cherished memories and a lifetime of effort, may offer you the freedom to enjoy retirement on your terms, providing comfort today and protecting you in the future.